Almost 50% of UK businesses have been negatively impacted by the cost of borrowing, with those in the hospitality sector and retail particularly hard hit (61%), according to new research.
The British Chambers of Commerce (BCC) Quarterly Economic Survey for the second quarter of 2023 found that reduced spending by consumers was also having a negative impact on UK firms.
The survey also reports growing concern over interest rates, with 41% reporting this as a concern in the second quarter of 2023, compared with 36% figure in the first quarter.
Shevaun Haviland, director general of the BCC, said: “With all eyes on the Bank of England later this week, our data is a timely reminder about the pain many businesses are suffering because of rising interest rates. Firms tell us every day that they are struggling to pay off debts and finding it difficult to take out loans.
“Business investment is fundamental to the economic growth everybody wants. Firms will only be able to invest when the financial burdens, including interest rates, ease.
“The Bank of England has indicated rates are nearing their peak. Businesses need clarity and certainty this week, that an end to the cost-of-borrowing pressures are really on the horizon.”
